Wyndham Destinations, Inc. (NYSE:WYND) Q3 2019 Earnings Conference Call - Final Transcript

Oct 30, 2019 • 08:30 am ET

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Wyndham Destinations, Inc. (NYSE:WYND) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, and welcome to Wyndham Destinations' Third Quarter 2019 Earnings Conference Call. [Operator instructions] As a reminder, ladies and gentlemen, this conference call is being recorded. If you do not agree with these terms, please disconnect at this time. Thank you.

I would now like to turn the call over to Chris Agnew. Please go ahead.

Executive
Chris Agnew

Thanks, Katherine. Good morning, and welcome. Before we begin, we'd like to remind you that our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements and the forward-looking statements made today are effective only as of today. We undertake no obligation to publicly update or revise these statements. The factors that could cause actual results to differ are discussed in our SEC filings and you can find a reconciliation of the non-GAAP financial measures discussed in today's call, and our earnings press release on our website at investor.wyndhamdestinations.com.

This morning, Michael Brown, our President and Chief Executive Officer will provide an overview on our strategic initiatives and our third quarter results. And Mike Hug, our Chief Financial Officer, will then provide greater detail on our results and discuss our outlook. Following these remarks, we will be available to respond to your questions.

With that, I'm pleased to turn the call over to Michael Brown

Executive
Michael Brown

Thank you, Chris. Good morning, everyone, and thank you for joining us today. We're happy to report that third quarter was another strong quarter, demonstrating the strength of our business model, cash flow generation and commitment to returning cash to shareholders.

This morning, we reported third quarter adjusted earnings per share of $1.57 versus our $1.46 to $1.54 guidance. We reported adjusted EBITDA of $267 million and year-to-date adjusted free cash flow of $466 million. For the full year, we are increasing guidance for adjusted EPS and adjusted free cash flow. We are narrowing our adjusted EBITDA guidance after updating for the impact of Hurricane Dorian. Gross VOI sales in the third quarter increased 4% over the prior year on a 4% increase in tours. We also had sequential and year-over-year improvement in our loan loss provision to 20.3% of gross VOI sales.

Since our last earnings call, we closed on two strategic transactions. Last week, we sold Wyndham Vacation Rentals to the Vacasa for $162 million. On August 7, RCI acquired Alliance Reservations Network or ARN, for $102 million. ARN is a travel technology platform that will enable us to provide integrated travel services and value-added benefits to RCI and other close user groups. This acquisition enables RCI to build a vertically integrated travel business by enhancing the value proposition of its core business and opening doors to business-to-business diversification and new channels of growth. These two transactions demonstrate our commitment to the growth of our core business by optimizing the allocation of resources strategically across the enterprise.

We are very excited about the acquisition of ARN. The business provides the platform and technology to enable RCI to expand